In our previous post, we explained that Search Engine Optimization services, or SEO, helps you show up in Google’s search results for free, or what marketing people refer to as organic search results.
Today, we are going to talk about Google Ads, and in particular, Google Search Ads. Among other takeaways, you will learn how important Google Search Ads are to Google’s business and why you might consider paying for Google Ads instead of SEO service. You’ll also learn how Google search ads work.
Wait – I’m Confused – I Thought the Google’s Ad Product was Called Google AdWords
When you think about the Google advertising platform, Google search ads first come to mind. However, the Google ad system feeds more than just placement in the search results. You can use it to buy ads on third party sites, ads that appear in YouTube videos, or ads in Google’s own shopping platform. Because these placements have nothing to do with “words,” AdWords no longer made sense as a product name, and so even though you will still see references to it everywhere online, Google AdWords no longer exists, and the product is now called Google Ads.
Why Google Ads Revenue is So Important to Google
We mentioned in our SEO article that when people have purchase intent, meaning they are ready to buy products and services, about 65% of searches result in a click on one of Google’s ads. This percentage is at an all-time high, and here’s why.
While Google has diversified its business, it still relies heavily on Google Ads as the cash cow that fuels Alphabet’s* entire business.
In Q1 2019, Google generated $36.3 billion in revenue, which they grew 16.5% year over year, and 84.5% of this revenue came from Google Ads. This is down from 85.5% compared to the previous year, which is to say they aren’t doing a great job of diversifying revenue, and they need to keep growing Google Ads revenue to maintain their stock price. As a result, they keep on tweaking the Google search results page to make it more likely that you will click on an ad. The trend towards an increasingly more mobile device-driven world is helping Google because it’s even more likely you will click on an ad when you are on your phone. It’s a zero-sum game, so more Google Ads clicks means less free clicks.
SEO v. Google Ads
While SEO is still a great marketing tactic because it usually offers the highest return on investment for many businesses, there are cases when you might want to consider using Google Ads before SEO. For example, if you have a new business, by definition, you have a new website. Google favors websites that have been around awhile, not to mention older websites generally have more content than new websites. You should expect it to take some time for new websites to show up regularly in the free/organic search engine results. If you want to start generating leads from your website right away, you should consider Google search ads.
Established businesses with great SEO can also benefit from Google Ads. If you have the capacity to do more business, you can generate additional leads using Google Ads. Assuming your advertising cost is less than your gross profit, you will increase profit. Google Ads can also help when things are slow and you need to give your lead generation efforts a little boost.
Exactly How Do Google Ads Work?
Google lets you target people who are searching for your products and services. If you have a location-based business, you can show ads only to people who are searching in a particular location. For example, if you are a pediatric dentist, you can target people who search for keywords like “pediatric dentists” within a 5-mile radius of your office. You can also target people who Google identifies to be in the market to buy your product or service. For example, if you are a mortgage broker, you can target people who Google identifies as shopping for new homes. These are just three of many targeting options you have.
Google is a pay for performance advertising product, which means they only charge you when someone interacts with your ad. You can choose to pay per click (aka PPC), per call, or per conversion. Conversions can measure many user actions, and it’s up to you to decide what to count. Examples of conversions including leads from phone calls or contact form submissions. Some companies measure conversions that are further up the funnel, such as downloads of white papers.
Google Ads lets you control your budget, and how much you pay for each click, call, or conversion. You will pay less for these interactions if your campaign is set up well.
Next week, we’ll get into more specifics about how Google search ads work, compare SEO to Google Ads, and explain why you should never let your marketing interns run your Google PPC campaigns.
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*Alphabet is Google’s parent company.